As we said last month, there are scores of reports, articles and opinions about the real estate market. We keep our information as local as possible, so that if you are thinking of buying or selling real estate in Pasadena, you will have data about trends here and how that may affect your decisions.
Here is what happened in January in Pasadena:
- The number of homes for sale in Pasadena increased from December, and also from last January. That’s an encouraging sign, as many of ours and our office mates clients are having a tougher time finding a home to buy. Many are keeping their homes off the market because of the shortage of replacement homes.
- This fact is confirmed by looking at the number of sales in November, December and January – down 33% for that three month period and lower than any number for the last year. There were almost 8% fewer sales in January 2014 than January 2013.
- Fewer sales and more on the market should translate to a softening of prices, and that turns out to be right again – the average price per square foot of sold properties dropped by almost six percent from December to January.
- That doesn’t mean that prices are necessarily falling. It’s better to look at the year-over-year figures and the trends over the year. For example, prices in January are up 17% from January 2013. Further last January marked a low point for prices for all of 2013. Prices were up by 27% from January to August.
- Further studies show that the median price of a Pasadena sold property is up over 10%. The median price is the price where half sold lower and half sold higher. The median price dropped from December to January, from $630,000 to $535,000. That’s a 15% decline… likely indicating that lower priced homes are selling.
- Another mixed signal is the average number of days on the market… this number was lowest in May, at an average of 42 days. The January figure is 63 days, up 50% from May, but down 16% from a year ago.
- Couple this number with the inventory of homes for sale, which is now higher than at any time since 2012. There are 2.4 months of supply on the market. Last month there were 1.8 months’ supply, and a year ago there was a bit less than now – 2.2 months’ supply. Over the year, inventory was never more than 2.3 months, and shrunk to 1.3 months in April.
- One last indicator is the number of pending sales, those under contract but not yet closed. This is supposed be a leading indicator for the next month or two. Pending sales have declined over the last three months, leading the number of closed sales down. There are fewer pending sales than at any time in the last year.
- Mixed signals – more inventory, fewer sales, fewer pending sales points to a continued slowing over the next 60 days. Prices softened in January based on prices per square foot and median prices, but that may indicate the overall prices of homes that have sold.
- One last item – this taken from the national press – [Nationally] Existing home sales have not seen a rebound from the increase in mortgage rates starting in May; a development Fannie Mae says is “worrisome.” Since June, existing-home sales have risen only once and fell for the third straight month in November to the lowest level in 2013. Pending home sales declined for the fifth straight month in October, though November’s figures indicate they have stabilized.
See our update for February in mid-March.